Exhibit 99.1
VERINT
POWERING ACTIONABLE INTELLIGENCE
PRESS RELEASE
CONTACTS
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INDUSTRY INFORMATION INVESTOR RELATIONS
Samya Ghuloum Alan Roden
Merritt Group Verint Systems Inc.
(415) 439-5231 (631) 962-9304
ghuloum@merrittgrp.com alan.roden@verint.com
VERINT REACTS TO PRELIMINARY CONCLUSIONS OF COMVERSE TECHNOLOGY
SPECIAL COMMITTEE
DELAYS 10-K FILING
MELVILLE, NY, April 17, 2006 - Verint Systems Inc. (NASDAQ: VRNT) today
announced that, as a result of the ongoing review by Comverse Technology, Inc.,
the 57% stockholder of Verint, relating to Comverse's stock option grants, and
the uncertainty of the impact of such review on Verint's historical financial
statements, Verint will be filing a Form 12b-25 with the Securities and Exchange
Commission indicating that its Annual Report on Form 10-K for the fiscal year
ended January 31, 2006 will not be filed on its due date of April 17, 2006.
Verint intends to file the Annual Report as soon as practicable after the
determination of whether any restatement of Verint's previously issued financial
statements is required. Verint did not seek a 15-day filing extension because it
does not believe it could file the Annual Report by the end of the extension
period.
Prior to Verint's initial public offering in May 2002, Verint was a wholly-owned
subsidiary of Comverse and, as a result, during that period certain Verint
employees received from Comverse options to purchase Comverse common stock.
Since May 2002 (other than the repricing of stock options initiated by Comverse
in June 2002), no Verint employee received compensatory awards from Comverse. As
previously announced on March 14, 2006, the Board of Directors of Comverse has
created a special committee (the "Comverse Special Committee"), composed of
outside directors, to review matters relating to Comverse's stock option grants,
including the accuracy of the stated dates of Comverse option grants and whether
Comverse followed all proper corporate procedures. The final outcome of the
Comverse Special Committee's review of its stock option practices may require
VERINT REACTS TO PRELIMINARY CONCLUSIONS OF COMVERSE TECHNOLOGY SPECIAL
COMMITTEE - DELAYS 10-K FILING
APRIL 17, 2006
PAGE 2
Verint to incur additional charges for Comverse stock option related expenses
with regard to Comverse grants of Comverse options to Verint employees when
Verint was wholly-owned by Comverse.
While Verint does not participate in, and is not privy to, the substance of the
Comverse Special Committee's review, Verint has been informed that, although the
Comverse Special Committee has not yet completed its work or reached final
conclusions, it has reached a preliminary conclusion that the actual dates of
measurement for certain past Comverse stock option grants for accounting
purposes differed from the recorded grant dates for such awards. Although Verint
is unable to determine the full effect of these matters, including whether any
restatement of its historical financial statements is required, until the
Comverse Special Committee completes its review, based on the Comverse Special
Committee's preliminary conclusion, Verint will be filing a Current Report on
Form 8-K with the SEC to the effect that Verint has concluded that its
historical financial statements for each of the fiscal years ended January 31,
2005, 2004, 2003, 2002 and 2001 and for the first three quarters of the fiscal
year ended January 31, 2006, and any related reports of its independent
registered public accounting firm, should no longer be relied upon.
Verint believes that the review by the Comverse Special Committee will have no
impact on Verint's historical GAAP revenue and pro forma results, including pro
forma net income. Pro forma net income is a measurement that Verint management
typically discloses in its quarterly earnings releases and excludes, among other
things, stock-based compensation.
Verint cautions that investors should not make assumptions about the cost of
sales, gross margin, operating expenses, income from operations, net income,
earnings per share or other financial statement items that may be affected by
stock option related expenses.
On April 14, 2006, Verint notified The Nasdaq Stock Market that, as a result of
its inability to file its Annual Report on Form 10-K when due, it will continue
to be in noncompliance with the NASDAQ requirements for continued listing under
NASDAQ Marketplace Rules that require Verint to make on a timely basis all
required filings with the SEC. Verint may receive a Staff Determination letter
from The Nasdaq Stock Market indicating that, due to its noncompliance with
NASDAQ Marketplace Rules, its common stock will be delisted unless it requests a
hearing in accordance with the Nasdaq Marketplace Rules. If Verint receives such
a Staff Determination Letter, it intends to request a hearing before the NASDAQ
VERINT REACTS TO PRELIMINARY CONCLUSIONS OF COMVERSE TECHNOLOGY SPECIAL
COMMITTEE - DELAYS 10-K FILING
APRIL 17, 2006
PAGE 3
Listing Qualifications Panel to review the Staff Determination. Under NASDAQ
Marketplace Rules, a request for a hearing stays the delisting action pending
the issuance of a written determination by the NASDAQ Listing Qualification
Panel.
ABOUT VERINT SYSTEMS INC.
Verint(R) Systems Inc., headquartered in Melville, New York, is a leading
provider of analytic software-based solutions for security and business
intelligence. Verint software, which is used by over 1,000 organizations in over
50 countries worldwide, generates actionable intelligence through the
collection, retention and analysis of voice, fax, video, email, Internet and
data transmissions from multiple communications networks. Verint is a subsidiary
of Comverse Technology, Inc. (NASDAQ: CMVT). Visit us at our website
www.verint.com.
Note: Certain statements concerning Verint's future revenues, earnings per
share, results or prospects are "forward-looking statements" under the Private
Securities Litigation Reform Act of 1995. There can be no assurances that
forward-looking statements will be achieved, and actual results could differ
materially from forecasts and estimates. Important risks, uncertainties and
other important factors that could cause actual results to differ materially
include, among others: potential impact on Verint's financial results related to
Comverse's creation of a special committee of the Board of Directors of Comverse
TO review matters relating to grants of Comverse stock options, including but
not limited to, the accuracy of the stated dates of Comverse option grants and
whether Comverse followed all of its proper corporate procedures and the results
of the Comverse special committee's review; the effect of Verint's failure to
timely file all required reports under the Securities Exchange Act of 1934, and
the resultant potential delisting of Verint's common stock on NASDAQ;
introducing quality products on a timely basis that satisfy customer
requirements and achieve market acceptance; lengthy and variable sales cycles
create difficulty in forecasting the timing of revenue; integrating the business
and personnel of CM Insight; risks associated with significant foreign
operations, including fluctuations in foreign currency exchange rates;
aggressive competition in all of Verint's markets, which creates pricing
pressure; integrating the business and personnel of MultiVision, including
implementation of adequate internal controls; managing our expansion in the Asia
Pacific region; risks that Verint's intellectual property rights may not be
adequate to protect its business or that others may claim that Verint infringes
upon their intellectual property rights; risks associated with integrating the
business and employees of Opus and RP Sicherheissysteme GMBH; risks associated
with Verint's ability to retain existing personnel and recruit and retain
qualified personnel in all geographies in which Verint operates; decline in
information technology spending; changes in the demand for Verint's products;
challenges in increasing gross margins; risks associated with changes in the
competitive or regulatory environment in which Verint operates; dependence on
government contracts; expected increase in Verint's effective tax rate;
perception that Verint improperly handles sensitive or confidential information;
inability to maintain relationships with value added resellers and systems
integrators; difficulty of improving Verint's infrastructure in order to be able
to continue to grow; risks associated with Comverse Technology, Inc. controlling
Verint's business and affairs; and other risks described in filings with the
Securities and Exchange Commission. All documents are available through the
SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at
www.sec.gov or from Verint's website at www.verint.com. Verint makes no
commitment to revise or update any forward-looking statements except as
otherwise required by law.
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Verint, the Verint word mark, Actionable Intelligence, Powering Actionable
Intelligence, STAR-GATE, RELIANT, NEXTIVA, LORONIX, SmartSight, Lanex and ULTRA
are trademarks of Verint Systems Inc. Other names may be trademarks of their
respective owners.